Case Information
*1 Before F LAUM and S YKES , Circuit Judges , and R ANDA , District Judge . [*]
S YKES , Circuit Judge . Berkshire Hathaway, Inc., owns a group of railway companies affiliated with the Burlington Northern Santa Fe railroad, which in turn owns the Corwith Intermodal Rail Yard in Chicago. (For simplicity, we refer to these companies and their corporate parent as “the Railroad.”) From 2000 to 2010, the Railroad used an independent contrac- tor, Rail Terminal Services, Inc. (“RTS”), to operate Corwith. The Teamsters Local Union No. 705 rеpresented RTS’s employ- ees, who were covered by the union’s health-and-pension plan. The Railroad contributed to the plan, as required by its contract with RTS.
In 2010 the Railroad decided to take the Corwith work in-house. Before doing so, however, the Railroad asked for wage-and-benefits concessions from Local 705. The union agreed. But when the Railroad ended its relationship with RTS and moved the Corwith work in-house, it entered into a labor agreement with a different union, the Transportation Commu- nications International Union (“TCIU”). RTS advised its Corwith employees of the Railroad’s decision and terminated their employment. The employees could reapply with the Railroad, but its wage-and-benefits package with TCIU was not as generous as the agreement between RTS and the Teamsters.
Local 705 and six employees filed this proрosed class action against the Railroad, RTS, and TCIU, alleging several claims for violation of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq ., and conspiracy to violate ERISA. The district court dismissed the complaint for failure to state a claim. See F ED . R. C IV . P. 12(b)(6). The plaintiffs have narrowed their case on appeal, focusing on just two claims: (1) unlawful interference with the attainment of retirement benefits in violatiоn of § 510 of ERISA, 29 U.S.C. § 1140; and (2) a related conspiracy claim.
We affirm the dismissal of these claims. As relevant here, § 510 of ERISA makes it unlawful for “any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant” in an employee benefits plan for the purpose of interfering with his attainment of benefits under the plan. 29 U.S.C. § 1140. Although liability under this statute is not limited to employers, the plaintiffs allege only an unlawful “discharge,” which presupposes an employment relationship. Only RTS was in an employment relationship with the mem- bers of Local 705, so the district court properly dismissed the § 510 claim against the other defendants.
As to RTS, the § 510 claim fails for a different reason. The complaint alleges that RTS discharged the employees because it lost its contract to perform the work at Corwith, not for the purpose of interfering with their attainment of pension benefits.
Finally, the conspiracy claim was properly dismissed because ERISA does not provide a cause of action for conspir- acy. To the extent that the claim is premised on Illinois com- mon law of conspiracy, it is preempted. See id. §§ 1132(a), 1144(a).
4
I. Background
This case comes to us on appeal from a Rule 12(b)(6) dismissal, so we take the following facts from the amended complaint. The Railroad owns Corwith Yard in Chicago and until 2000 operated it through a subsidiary. In May 2000 the [1] Railroad contracted with RTS to operate Corwith. As an independent contractor, RTS used its own employees to perform the work at the rail yard. [2]
Teamsters Local 705 represented the RTS employees who worked at Corwith. In fact, Local 705 had been the labor representative for the employees at Corwith for morе than 60 years. Local 705 members were eligible to participate in the union’s pension plan. Participants who attained 25 years or more of service were eligible for a full service pension, which (unlike early pensions) paid “unreduced pension benefits calculated at the highest rate and with no reduction for age.” In other words, the more years of service a participant had, the higher his pеnsion would be. We do not know much more 5 about the employee benefits plan except that the Railroad made contributions to it as required by contract.
In 2010 the Railroad decided to stop outsourcing the work at Corwith and move it in-house. Before making this change, the Railroad demanded wage-and-benefits concessions from Local 705 amounting to over $1 million. Local 705 agreed. Despite these cоncessions, however, when the Railroad terminated its contract with RTS and took the Corwith work in-house, it entered into a labor agreement with TCIU. This agreement contained lower wage scales and a 401(k) retire- ment plan instead of a pension, and the Railroad was not obligated to make contributions to the employees’ 401(k) accounts.
In October 2010 RTS informed Local 705 and the Corwith employees that it was losing its сontract to provide services at Corwith and the employees would be laid off at the end of the year. RTS explained that the employees could apply to work for the Railroad, but they would lose the seniority they had acquired at RTS and their wages and benefits under the labor agreement between the Railroad and TCIU were likely to be less generous than they were under RTS’s agreement with the Teamsters.
Local 705 and six individual union members filed this proposed class action against the Railroad, RTS, and TCIU, alleging claims under § 510 and § 511 of ERISA and also asserting a claim for civil conspiracy. The plaintiffs (we refer [3] *6 6
to them collectively as “Local 705”) quickly filed an amended complaint, and the defendants moved to dismiss it for failure to state a claim. See F ED . R. C IV . P. 12(b)(6). The district court granted the motion and dismissed all claims against all defendants. The court swiftly dispatched the claim under § 511 of ERISA; that section allows for criminal penalties, not a private civil cause of action. See 29 U.S.C. § 1141 (making it a crime to use fraud, force, threats, or violence to restrain, coerce, intimidate a participant or beneficiary of an employee benefits plan).
Turning to the § 510 claim, the court noted that neither the Railroad nor TCIU had an employment relationship with the Corwith employees, so they could not be liable for unlawfully discharging them in violation of the statute. See id. § 1140 (making it unlawful to “discharge … a participant” of an employee benefits plan “for the purpose of interfering with the attainment” of benefits under the plan). As for RTS, the employer, the court held that the § 510 claim failed because the amended complaint alleged that RTS discharged the Corwith employees because it lost its contract with the Railroad, not for the purpose of preventing them from attaining pension benefits. Finally, the court dismissed the conspiracy claim because ERISA does not provide for a cause of action for 7 conspiracy and preempts any conspiracy claim rooted in state law. Alternatively, the court held that the amended complaint did not plead sufficient facts to plausibly allege the existence of a conspiracy. [4]
Local 705 timely appealed.
II. Discussion
We review the district court’s Rule 12(b)(6) dismissal order
de novo, accepting the allegations in the amended complaint
as true and drawing reasonable inferences in favor of the
plaintiffs.
See Larson v. United Healthcare Ins. Co.
,
A. Conspiracy to Interfere with the Attainment of Benefits
Protected by ERISA
The amended complaint alleges that the defendants conspired to interfere with the Corwith employees’ attainment of benefits under the Teamsters’ pension plan. It does not specify the legal source of this claim. Local 705 urges us to recognize a federal cause of action for conspiracy to violate § 510 of ERISA. We reject this argument for several reasons.
First, ERISA does not contain an express cause of action for conspiracy to violate § 510. Section 510 makes it unlawful to take certain adverse actions against the participants in an employee benefits plan for the purpose of interfering with their attainment of benefits under the plan. 29 U.S.C. § 1140. But the statute nowhere mentions conspiracies or unlawful agreemеnts to interfere with the attainment of benefits. See id. Section 502(a) of ERISA provides a civil cause of action for the private enforcement of rights protected by § 510, see id. § 1132(a)(3); see also Tolle v. Carroll Touch, Inc. , 977 F.2d 1129, 1133 (7th Cir. 1992), but it, too, lacks any reference to a cause of action for conspiracy. ERISA is simply silent on the subject.
It is canonical that “[t]he express provision of one method
of enforcing a substantive rule suggests that Congress intended
to preclude оthers.”
Alexander v. Sandoval
, 532 U.S. 275, 290
(2001);
see also Nw. Airlines, Inc. v. Transp. Workers Union
, 451
U.S. 77, 94 n.30 (1981) (“ ‘A frequently stated principle of
statutory construction is that when legislation expressly
provides a particular remedy or remedies, courts should not
expand the coverage of the statute to subsume other reme-
dies.’ ” (quoting
Nat’l R.R. Passenger Corp. v. Nat’l Ass’n of R.R.
Passengers
,
Accordingly, there is no basis for recognizing an implied cause of action for conspiracy to violate § 510. ERISA’s cоmpre- hensive enforcement scheme already safeguards against interference with the attainment of benefits by providing a civil cause of action for the private enforcement of the substantive rights conferred by § 510.
Moreover, although the Supreme Court has endorsed the
court’s authority to develop a federal common law pertaining
to the rights and obligations protected by ERISA,
see Firestone
Tire & Rubber Co. v. Bruch
,
For instance, we have previously declined to use this
limited common-law authority to extend liability to pеrsons
beyond ERISA’s explicit reach—namely, nonfiduciary profes-
sionals who assist plan administrators in complying with
reporting requirements.
See Pappas
,
Local 705 relies on the Ninth Circuit’s opinion in
Inter-Modal Rail Employees Ass’n v. Atchison, Topeka & Santa Fe
Railway
,
In a terse footnote at the beginning of its opinion, the Ninth
Circuit rejected the outside contractor’s argument that § 510
“does not support a cause of action against a non-employer for
conspiring with an employer to interfere with ERISA-protected
benefits.”
See id.
at 350 n.5. The court analogized to its earlier
opinion in
Tingey v. Pixley-Richards West, Inc.
, which had held
that “an insurer who coerces аn employer to fire an employee
must be covered by [§ 510’s] language.”
This cursory discussion in a single footnote cannot be understood as a formal ruling recognizing an implied statutory cause of action for conspiracy to violate § 510. The Ninth Circuit never meaningfully addressed the statutory text, the presumption against implied statutory causes of action, or the limits of the court’s power to develop federal common law in the context of ERISA. We also question whether Tingey —the Ninth Circuit precedent cited in the Inter-Modal footnote— would support the extraordinary step of recognizing an implied conspiracy cause оf action under ERISA. Indeed, Tingey makes no mention of conspiracy allegations at all. In short, Local 705 reads the Inter-Modal footnote for much more than it’s worth. The case does not support recognizing a conspiracy cause of action here.
Moreover, where ERISA omits a cause of action for conspir-
acy to interfere with employee benefits, Illinois law cannot fill
the void. Subject to a few inapplicable exceptions, ERISA
§ 514(a) preempts all state laws that “relate to any employee
benefit[s] plan.” 29 U.S.C. § 1144(a). Locating the boundaries of
this very broad preemption language has sometimes been
difficult,
see N.Y. State Conference of Blue Cross & Blue Shield
Plans v. Travelers Ins. Co.
, 514 U.S. 645, 655 (1995);
Trs. of the
AFTRA Health Fund v. Biondi
,
Thus, on its own, the civil enforcement scheme in § 502(a)
has “extraordinary pre-emptive power” that extends to
ordinary common-law causes of action.
Id.
(quoting
Metro. Life
Ins. Co. v
.
Taylor
,
Accordingly, the district court’s decision to dismiss the conspiracy claim was correct on several grounds. First, ERISA does not provide an express cause of action for conspiracy to interfere with the attainment of benefits in violation of § 510. Second, it would be improper for us to recognize an implied claim for conspiracy to violate § 510 or to adopt one under the federal common law. And third, if the plaintiffs’ conspiracy claim is premised on state law, it is prеempted.
B. Section 510 Claim for Interference with Attainment of Benefits
As relevant here, ERISA § 510 makes it “unlawful for any
person to discharge, fine, suspend, expel, discipline, or
discriminate against a participant [in an employee benefits
plan] … for the purpose of interfering with the attainment of
any right to which such participant may become entitled under
the plan.” 29 U.S.C. § 1140. A § 510 claim requires a showing of
specific intent to interfere with the participant’s attainment of
benefits.
Nauman v. Abbott Labs.
, 669 F.3d 854, 857 (7th Cir.
2012). Actions that only incidentally affect the participant’s
benefits under a plan do not violate § 510.
Isbell v. Allstate Ins.
Co.
,
The § 510 claim here is premised on allegations that the
Corwith employees were unlawfully discharged in violation of
the statute. The term “discharge” as used in § 510 presupposes
an employment relationship; only an employer can discharge
an employee.
See Feinberg v. RM Acquisition
,
LLC
,
We are not saying that only еmployers can be liable for
violating § 510—although some of our opinions can be read to
suggest as much.
See Andersen v. Chrysler Corp.
,
By its terms, § 510 does not condition liability on the
existence of an employment relationship. It restrains “any
person,” not just employers.
See
29 U.S.C. § 1140;
see also
Custer v. Pan Am. Life Ins. Co.
,
Moreover, the list of prohibited actions is not limited to
those capable of being pеrformed by employers; nonemployers
can engage in at least some of the acts prohibited by § 510.
See
Feinberg
,
Here, however, the § 510 claim rests entirely on allegations of unlawful discharge. The amended complaint does not allege that the defendants fined, suspended, expelled, disciplined, or discriminated against the plaintiffs. Accordingly, the claim cannot go forward against the Railroad or TCIU, neither of which had an employment rеlationship with the Corwith employees.
On the other hand, RTS employed the laborers at Corwith, but here the plaintiffs’ allegations are insufficient in a different respect. The amended complaint alleges that RTS laid off its work force at Corwith because the Railroad ceased outsourcing the work at the rail yard to it. Without a contract to perform the work, RTS no longer had any need to employ the union’s members at Corwith; as a consequence of losing its contract with the Railroad, the company discharged its Corwith employees. The amended complaint does not allege that RTS’s discharge decision was motivated by a specific intent to frustrate the employees’ attainment of pension benefits. Nor are there sufficient factual allegations to support a reasonable inference the RTS аcted with that intent. Accordingly, the § 510 claim fails against all the defendants.
For the foregoing reasons, the district court properly dismissed the amended complaint for failure to state a claim.
A FFIRMED .
Notes
[*] The Honorable Rudolph T. Randa, District Judge for the United States (continued...)
[*] (...continued) District Court for the Eastern District of Wisconsin, sitting by designation.
[1] The Railroad defendants are Burlington Northern Santa Fe, LLC (f/k/a Burlington Northern Santa Fe Corporаtion); BNSF Railway Company; Santa Fe Terminal Services, Inc.; and Berkshire Hathaway, Inc. Santa Fe Terminal Services, Inc., was a subsidiary of BNSF Railway and operated Corwith Yard in Chicago until M ay 2000; it no longer exists. Berkshire Hathaway owns these Burlington Northern affiliates.
[2] In addition to RTS, the amended complaint names two companies identified as RTS’s corporate parents: Rail M anagement Services, LLC, and Carrix, Inc. We refer to the RTS defendants collectively as “RTS” unless the context requires otherwise.
[3] The Railroad argues that Local 705 lacks standing, but our decision in (continued...)
[3] (...continued)
Southern Illinois Carpenters Welfare Fund v. Carpenters Welfare Fund of Illinois
,
[4] Regarding the corporate parents and affiliates of RTS and BNSF Railway
(Berkshire Hathaway, Burlington N orthern Santa Fe, Santa Fe Terminal
Services, Rail M anagement Services, and Carrix), the court also held, as an
independent ground for dismissal, that the amended complaint failed to
allege any specific wrongdoing by them.
See Cent. States, Se. & Sw. Areas
Pension Fund v. Reimer Express World Corp.
,